Penumbra, Inc. Reports Second Quarter 2022 Financial Results

ALAMEDA, Calif., Aug. 4, 2022 — Penumbra, Inc. (NYSE: PEN), a global healthcare company focused on innovative therapies, today reported financial results for the second quarter ended June 30, 2022.

  • Revenue of $208.3 million in the second quarter of 2022, an increase of 13.1%, or 15.3% in constant currency1, compared to the second quarter of 2021.

Second Quarter 2022 Financial Results
Total revenue increased to $208.3 million for the second quarter of 2022 compared to $184.3 million for the second quarter of 2021, an increase of 13.1%, or 15.3% on a constant currency basis. The United States represented 68% of total revenue and international represented 32% of total revenue for the second quarter of 2022. Revenue from sales of vascular products grew to $123.5 million for the second quarter of 2022, an increase of 22.7%, or 24.5% on a constant currency basis. Revenue from sales of neuro products grew to $84.8 million for the second quarter of 2022, an increase of 1.5%, or 4.3% on a constant currency basis.

Gross profit was $134.0 million, or 64.3% of total revenue for the second quarter of 2022, compared to $118.7 million, or 64.4% of total revenue, for the second quarter of 2021. Gross margin is impacted by our ability to scale production capacity to support our expanding portfolio of products, which enabled us to navigate through some macroeconomic factors such as labor shortages, inflation and supply chain headwinds in the three months ended June 30, 2022, as well as our continued investments in COVID-19 related safety measures.

Total operating expenses were $134.2 million, or 64.4% of total revenue, for the second quarter of 2022, including a $1.8 million amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition. Excluding this charge, total non-GAAP operating expenses1 were $132.4 million, or 63.5% of total revenue, for the second quarter of 2022. This compares to GAAP and non-GAAP operating expenses of $108.4 million, or 58.8% of total revenue, for the second quarter of 2021. R&D expenses were $19.6 million for the second quarter of 2022, compared to $17.7 million for the second quarter of 2021. SG&A expenses were $114.6 million for the second quarter of 2022, compared to $90.6 million for the second quarter of 2021.

Operating loss for the second quarter of 2022 was $0.1 million. Excluding the charge associated with the amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition, non-GAAP operating income1 was $1.6 million. This compares to GAAP and non-GAAP operating income of $10.3 million for the second quarter of 2021.

Updated Full Year 2022 Financial Outlook
The Company is maintaining its guidance for 2022 total revenue to be in the range of $860 million to $875 million. Due to foreign currency fluctuations, the Company expects total 2022 reported revenue to be at the lower end of this range, however it expects to maintain growth of 15 – 17% over 2021 revenue on a constant currency basis.

Webcast and Conference Call Information
Penumbra, Inc. will host a conference call to discuss the second quarter 2022 financial results after market close on Thursday, August 4, 2022 at 4:30 PM Eastern Time. The conference call can be accessed live over the phone by dialing (888) 330-2443 for domestic and international callers (conference id: 4604622), or the webcast can be accessed on the “Events” section under the “Investors” tab of the Company’s website at: www.penumbrainc.com. The webcast will be available on the Company’s website for at least two weeks following the completion of the call.

About Penumbra
Penumbra, Inc., headquartered in Alameda, California, is a global healthcare company focused on innovative therapies. Penumbra designs, develops, manufactures and markets novel products and has a broad portfolio that addresses challenging medical conditions in markets with significant unmet need. Penumbra supports healthcare providers, hospitals and clinics in more than 100 countries. For more information, visit www.penumbrainc.com and connect on Twitter and LinkedIn.

1See “Non-GAAP Financial Measures” for important information about our use of non-GAAP measures.

Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses the following non-GAAP financial measures in this press release: a) constant currency and b) non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP net income and non-GAAP diluted earnings per share (“EPS”).

Constant Currency. The Company’s constant currency revenue disclosures estimate the impact of changes in foreign currency rates on the translation of the Company’s current period revenue as compared to the applicable comparable period in the prior year. This impact is derived by taking the current local currency revenue and translating it into U.S. dollars based upon the foreign currency exchange rates used to translate the local currency revenue for the applicable comparable period in the prior year, rather than the actual exchange rates in effect during the current period. It does not include any other effect of changes in foreign currency rates on the Company’s results or business.

Non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP net income and non-GAAP diluted EPS. The adjustments to the GAAP financial measures reflect the exclusion of:

  • the effect of the amortization of finite lived intangible assets acquired in connection with the Sixense acquisition over their estimated useful lives; and
  • the tax deficiencies or excess tax benefits associated with share-based compensation arrangements.

Full reconciliation of these non-GAAP measures to the most comparable GAAP measures is set forth in the tables below.

Our management believes the non-GAAP financial measures disclosed in this press release are useful to investors in assessing the operating performance of our business and provide meaningful comparisons to prior periods and thus a more complete understanding of our business than could be obtained absent this disclosure. Specifically, we consider the change in constant currency revenue as a useful metric as it provides an alternative framework for assessing how our underlying business performed excluding the effect of foreign currency rate fluctuations. We consider non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP net income and non-GAAP diluted EPS useful metrics as they provide an alternative framework for assessing how our underlying business performed excluding the amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition and the tax deficiencies or excess tax benefits associated with share-based compensation arrangements.

The non-GAAP financial measures included in this press release may be different from, and therefore may not be comparable to, similarly titled measures used by other companies. These non-GAAP measures should not be considered in isolation or as alternatives to GAAP measures. We urge investors to review the reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures included in this press release, and not to rely on any single financial measure to evaluate our business.

Forward-Looking Statements
Except for historical information, certain statements in this press release are forward-looking in nature and are subject to risks, uncertainties and assumptions about us. Our business and operations are subject to a variety of risks and uncertainties and, consequently, actual results may differ materially from those projected by any forward-looking statements. Factors that could cause actual results to differ from those projected include, but are not limited to: the impact of the COVID-19 pandemic on our business, results of operations and financial condition; failure to sustain or grow profitability or generate positive cash flows; failure to effectively introduce and market new products; delays in product introductions; significant competition; inability to further penetrate our current customer base, expand our user base and increase the frequency of use of our products by our customers; inability to achieve or maintain satisfactory pricing and margins; manufacturing difficulties; permanent write-downs or write-offs of our inventory; product defects or failures; unfavorable outcomes in clinical trials; inability to maintain our culture as we grow; fluctuations in foreign currency exchange rates; potential adverse regulatory actions; and the potential impact of any acquisitions, mergers, dispositions, joint ventures or investments we may make. These risks and uncertainties, as well as others, are discussed in greater detail in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 22, 2022. There may be additional risks of which we are not presently aware or that we currently believe are immaterial which could have an adverse impact on our business. Any forward-looking statements are based on our current expectations, estimates and assumptions regarding future events and are applicable only as of the dates of such statements. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change.

Penumbra, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands)

June 30, 2022

December 31, 2021

Assets

Current assets:

Cash and cash equivalents

$ 58,234

$ 59,379

Marketable investments

146,135

195,496

Accounts receivable, net

187,389

133,940

Inventories

295,883

263,504

Prepaid expenses and other current assets

30,320

29,155

Total current assets

717,961

681,474

Property and equipment, net

63,458

58,856

Operating lease right-of-use assets

177,423

131,955

Finance lease right-of-use assets

34,743

36,276

Intangible assets, net

86,162

90,618

Goodwill

165,779

166,388

Deferred taxes

68,404

65,698

Other non-current assets

13,970

12,985

Total assets

$ 1,327,900

$ 1,244,250

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$ 23,096

$ 13,421

Accrued liabilities

111,405

99,796

Current operating lease liabilities

9,297

8,267

Current finance lease liabilities

1,806

1,713

Total current liabilities

145,604

123,197

Non-current operating lease liabilities

183,155

137,045

Non-current finance lease liabilities

25,654

26,523

Other non-current liabilities

3,472

3,558

Total liabilities

357,885

290,323

Stockholders’ equity:

Common stock

38

37

Additional paid-in capital

937,837

910,614

Accumulated other comprehensive loss

(10,158)

(2,630)

Retained earnings

42,298

45,906

Total stockholders’ equity

970,015

953,927

Total liabilities and stockholders’ equity

$ 1,327,900

$ 1,244,250

Penumbra, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except share and per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Revenue

$ 208,344

$ 184,258

$ 412,239

$ 353,462

Cost of revenue

74,309

65,572

150,786

123,439

Gross profit

134,035

118,686

261,453

230,023

Operating expenses:

Research and development

19,559

17,738

40,123

35,814

Sales, general and administrative

114,615

90,636

225,515

170,434

Total operating expenses

134,174

108,374

265,638

206,248

(Loss) income from operations

(139)

10,312

(4,185)

23,775

Interest (expense) income, net

(72)

299

(119)

779

Other expense, net

(956)

(408)

(1,967)

(1,884)

(Loss) income before income taxes

(1,167)

10,203

(6,271)

22,670

Provision for (benefit from) income taxes

2,520

1,904

(2,663)

3,445

Consolidated net (loss) income

$ (3,687)

$ 8,299

$ (3,608)

$ 19,225

Net loss attributable to non-controlling interest

(932)

(1,842)

Net (loss) income attributable to Penumbra, Inc.

$ (3,687)

$ 9,231

$ (3,608)

$ 21,067

Net (loss) income attributable to Penumbra, Inc. per share:

Basic

$ (0.10)

$ 0.25

$ (0.10)

$ 0.58

Diluted

$ (0.10)

$ 0.25

$ (0.10)

$ 0.56

Weighted average shares outstanding:

Basic

37,767,519

36,523,011

37,707,156

36,489,548

Diluted

37,767,519

37,582,348

37,707,156

37,564,881

Penumbra, Inc.

Reconciliation of GAAP Operating Expenses and GAAP Operating (Loss) Income to Non-GAAP Operating Expenses and Non-
GAAP Operating Income (Loss)1

(unaudited)

(in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

GAAP operating expenses

$ 134,174

$ 108,374

$ 265,638

$ 206,248

GAAP total operating expenses includes the effect of the
following items:

Amortization of finite lived intangible assets acquired

1,785

3,569

Non-GAAP operating expenses

$ 132,389

$ 108,374

$ 262,069

$ 206,248

GAAP operating (loss) income from operations

$ (139)

$ 10,312

$ (4,185)

$ 23,775

GAAP operating (loss) income from operations includes the
effect of the following items:

Amortization of finite lived intangible assets acquired

1,785

3,569

Non-GAAP operating income (loss) from operations

$ 1,646

$ 10,312

$ (616)

$ 23,775

1See “Non-GAAP Financial Measures” for important information about our use of non-GAAP measures.

Penumbra, Inc.

Reconciliation of GAAP Net (Loss) Income and GAAP Diluted EPS to Non-GAAP Net Income and Non-GAAP Diluted EPS1

(unaudited)

(in thousands, except share and per share amounts)

Three Months Ended

June 30, 2022

Three Months Ended

June 30, 2021

Six Months Ended
June 30, 2022

Six Months Ended
June 30, 2021

Net (loss)
income

Diluted
EPS

Net
income

Diluted
EPS

Net (loss)
income

Diluted
EPS

Net
income

Diluted
EPS

GAAP net (loss) income

$ (3,687)

$ (0.10)

$ 9,231

$ 0.25

$ (3,608)

$ (0.10)

$ 21,067

$ 0.56

GAAP net (loss) income includes the effect
of the following items:

Amortization of finite lived intangible assets
acquired

1,785

0.05

3,569

0.10

Tax effect on the non-GAAP adjustments above2

(416)

(0.01)

(832)

(0.02)

Tax deficiencies (excess tax benefits) related to stock
compensation awards

2,725

0.07

(1,403)

(0.04)

944

0.02

(3,186)

(0.08)

Non-GAAP net income

$ 407

$ 0.01

$ 7,828

$ 0.21

$ 73

$ 0.00

$ 17,881

$ 0.48

Weighted average shares outstanding used to compute:

GAAP diluted EPS

37,767,519

37,582,348

37,707,156

37,564,881

Non-GAAP diluted EPS3

38,686,507

37,582,348

38,722,453

37,564,881

1See “Non-GAAP Financial Measures” for important information about our use of non-GAAP measures.

2For the three and six months ended June 30, 2022, management used a combined federal and state tax rate of 23.29% to compute the tax effect of non-GAAP measures.

3For the purposes of calculating Non-GAAP diluted EPS for the three and six months ended June 30, 2022, non-GAAP diluted weighted average shares outstanding of 38,686,507 and 38,722,453 respectively were used, as the Company had non-GAAP net income in the period.

Penumbra, Inc.

Reconciliation of Revenue Growth by Geographic Regions to Constant Currency Revenue Growth1

(unaudited)

(in thousands, except for percentages)

Three Months Ended June 30,

Reported Change

FX Impact

Constant Currency Change

2022

2021

$

%

$

$

%

United States

$ 141,456

$ 128,402

$ 13,054

10.2 %

$ –

$ 13,054

10.2 %

International

66,888

55,856

11,032

19.8 %

4,185

15,217

27.2 %

Total

$ 208,344

$ 184,258

$ 24,086

13.1 %

$ 4,185

$ 28,271

15.3 %

Six Months Ended June 30,

Reported Change

FX Impact

Constant Currency Change

2022

2021

$

%

$

$

%

United States

$ 285,764

$ 248,472

$ 37,292

15.0 %

$ –

$ 37,292

15.0 %

International

126,475

104,990

21,485

20.5 %

6,378

27,863

26.5 %

Total

$ 412,239

$ 353,462

$ 58,777

16.6 %

$ 6,378

$ 65,155

18.4 %

Penumbra, Inc.

Reconciliation of Revenue Growth by Product Categories to Constant Currency Revenue Growth1

(unaudited)

(in thousands, except for percentages)

Three Months Ended June 30,

Reported Change

FX Impact

Constant Currency Change

2022

2021

$

%

$

$

%

Vascular

$ 123,543

$ 100,684

$ 22,859

22.7 %

$ 1,810

$ 24,669

24.5 %

Neuro

84,801

83,574

1,227

1.5 %

2,375

3,602

4.3 %

Total

$ 208,344

$ 184,258

$ 24,086

13.1 %

$ 4,185

$ 28,271

15.3 %

Six Months Ended June 30,

Reported Change

FX Impact

Constant Currency Change

2022

2021

$

%

$

$

%

Vascular

$ 246,352

$ 189,849

$ 56,503

29.8 %

$ 2,777

$ 59,280

31.2 %

Neuro

165,887

163,613

2,274

1.4 %

3,601

5,875

3.6 %

Total

$ 412,239

$ 353,462

$ 58,777

16.6 %

$ 6,378

$ 65,155

18.4 %

1See “Non-GAAP Financial Measures” for important information about our use of non-GAAP measures.

Investor Relations
Penumbra, Inc.
510-995-2461
[email protected]

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SOURCE Penumbra, Inc.

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